Grace Howie, vice-president of trade and working capital fintech & product strategy at J.P. Morgan Payments, and Ashish Jain, CFO at Slope, a B2B payments platform, explain how J.P. Morgan’s debt facility and strategic investment support Slope on its rapid expansion and provide J.P. Morgan clients access to Slope’s embedded finance solution. Starting this July, the companies have engaged in a strategic alliance to unlock cash flow constraints for J.P. Morgan clients’ small and medium-sized enterprise (SME) business customers in a timely manner.
Q: The ongoing volatility within global trade means that businesses are experiencing a prolonged period of pressure on their cash flows. Where are you focusing your efforts to support clients in these challenging times?
Howie: In today’s environment, there are a number of factors impacting the cash flow of a business, from geopolitical events and nearshoring, to inflation, higher-for-longer rates and quantitative tightening. This means operating margins are being squeezed, with inventory purchases and capital expenditure often being delayed. With tighter lending standards, it is harder for SMEs to obtain access to credit, especially when there is already an estimated US$2.5tn lending gap. And given the macro environment, where pressure on cash flow is already prominent, if SMEs don’t have access to credit, they can’t purchase the inventory that they need to survive and continually grow their business, leading to supply chain disruptions – especially for the enterprise clients that trade and working capital serve. As such, we continually look for ways to support our clients and their business customers.
Working with Slope means we can provide much-needed support to our clients’ customers, SMEs, which make up around 90% of all businesses and truly represent the backbone of our economy. It is critical that we provide effective tools to meet their working capital and supply chain requirements, enabling their businesses to grow, and help strengthen global trade more broadly.
Q: How did the relationship with Slope originate and how does the solution respond to the challenges depicted and the growing need for enhanced digital B2B payments?
Howie: At J.P. Morgan Payments, we are committed to expanding our trade and working capital solutions to meet client needs, and we constantly monitor trends and work with our clients to understand how to prioritise our investments.
When looking to enhance our capabilities, we consider various options around whether to build, buy or partner, as well as how to leverage the power of J.P. Morgan firm-wide to support our clients. We strongly believe in the power of collaboration as a means of bringing best-in-class capabilities to our clients.
Especially with the rise of omnichannel, direct-to-consumer sale strategies and multiple inbound client requests, it became clear there was a need to provide an integrated solution for our clients, as merchants. Merchants, in particular, want simple-to-implement solutions that enable them to provide liquidity to their customers at the point of sale via their online checkout, in-store or out in the field. As such, our focus was to find a solution that not only offered our clients the ability to receive payment at point of purchase, but also, importantly, to offer an extension of payment terms to their business customers to help procure the required inventory and gain access to credit.
And in this instance, because there is a need to offer a flexible front-end origination and underwriting platform, the partnership route made sense.
Slope, a digital B2B payments platform, is a rapidly growing fintech that aims to digitise the US$125tn B2B payments market by providing short-term embedded financing, order-to-cash automation, credit management and data enrichment solutions, via its innovative and AI-driven approach.
It made sense for J.P. Morgan Payments to form a strategic relationship with Slope, since their order-to-cash automation solution and AI-driven underwriting capabilities will help us diversify our product offerings to address these unmet client needs. We are excited to be working with Ashish and the team at Slope to unlock ways to better serve this target market.
Jain: Equally, as a company that serves some of the largest enterprises globally, J.P. Morgan is an ideal organisation for us to work with. The team understands what is going on at the heart of the US economy, especially when it comes to enterprise clients that are looking to digitise their order-to-cash workflow and provide for the needs of their end business customers.
Slope’s mission is to transition the world’s B2B economy online. We look to bring simplicity and flexibility to B2B payments so businesses can seamlessly handle transactions digitally and be empowered with the resources that they need to grow.
In a nutshell, what Slope does is take an embedded finance approach to create an efficient experience between a merchant and its business customers. We seek to help those customers to readily purchase goods from the merchant, while also helping that merchant to enhance its own offerings by being able to accept various forms of payment.
Howie: And through our agreement, we can now refer our clients, as merchants, to Slope, with the J.P. Morgan debt facility providing the capital on the back-end to extend the payment terms, in the form of a loan.
Q: Drilling down into the solution, what benefits can Slope’s offerings – and this relationship – bring for merchants and their business customers?
Jain: We aim to create a streamlined, end-to-end experience between a merchant and its business customers. Key to this is addressing all the existing manual workflows that are involved in B2B transactions. In particular, Slope is transforming onboarding and underwriting processes through automation, removing the need for businesses to provide know your customer (KYC) and know your business (KYB) documents, and also the need for merchants to carry out a range of time-consuming credit checks and ongoing monitoring. This enables business customers to get through the funnel faster, making approval far more streamlined and efficient, and thereby allowing customers to access all-important credit quickly and easily – to the degree that underwriting decisions can be made within seconds. In turn, this drives traffic to the merchant’s website, and, if a customer has a great experience, this leads to increased business retention. What we effectively do is drive conversion, volumes and repeat purchases.
Another feature that really sets this offering apart is the payment flexibility. It is important for business customers to have different payment options available to them; they might prefer to pay via their bank, Automated Clearing House or a credit card. And together, we are able to do all that, with J.P. Morgan Payments powering money movement from end to end.
Howie: It has been found that nine out of 10 CFOs want more accounts receivables automation in order to solve payment delays and discrepancies in invoicing. And this speaks to the problem that Slope is solving: if you integrate a suite of payment solutions at checkout, inclusive of a financing solution for business customers, it enables the merchant to receive payment – in the mode of the customer’s choice – at the point of purchase. This, therefore, helps to mitigate non-payment risk for J.P. Morgan clients as merchants while simultaneously keeping business customers happy with access to credit, purchasing larger amounts of inventory without draining cash, improving supply chain health and supporting growth. Moreover, business customers are able to automate their accounts payables process, further enhancing efficiency and cash flow, and ultimately leading to increased savings and reduced payment delays.
It is a win-win.
Q: How is Slope applying technology to deliver these enhancements?
Jain: Among everything we do, we believe our application of AI to data enrichment and risk management has led to the greatest business impact. Our team is deeply technical; many of our employees come from backgrounds across autonomous driving, AI research and robotics. We chose to build our entire stack on top of real-time data (open banking) and an underwriting system with instant onboarding, continuous monitoring and active learning built in. These design choices were second nature to us, but an anomaly in finance, where loan applications take days, processes are manual, and data is not real-time.
Achieving such a level of automation is only possible by deeply integrating AI at every step. For instance, bank transactions are messy, complex and context-dependent. To solve this we built Slope TransFormer, a proprietary large language model (LLM) trained to understand, enrich and categorise bank transactions with human-level precision. Another example is KYB: traditional solutions are surface-level and lagging – often requiring a human to manually check for web presence, legitimacy and bankruptcies. To solve this we built DeepKYB, an AI agent with web access trained to carry out the entire due diligence process and generate a report that’s fed directly into our database. Importantly, all these systems are built to continuously improve with more and more data.
These advancements ultimately lead to concrete benefits for our customers, such as instant, automated approvals, and impact our bottom line with approval rates, loss rates and operating costs.
Howie: The AI capabilities that Slope has are true market differentiators in this space. The fact that they not only use AI for initial underwriting but also for the ongoing risk monitoring of the portfolio is what really attracted us to Slope. The continuous reviewing of a business customer means Slope’s team can be alerted to circumstances that allow a higher credit limit to be provided to them, bringing huge value to those businesses. That isn’t something we’ve seen anywhere else in the market.
To learn more about J.P. Morgan’s Trade and Working Capital Solutions, visit https://www.jpmorgan.com/payments/solutions/trade-and-working-capital
